As of Friday, August 14, 2009, the FDIC is now Bankrupt

As of Friday, August 14, 2009, the FDIC is now Bankrupt

The Sovereign Society Offshore A-Letter
Tuesday, August 18, 2009


As of Friday, August 14, 2009, the
FDIC is now Bankrupt

Dear A-Letter Reader,

That’s right, friend.

Read that headline again. Commit it to memory. Unlike the JFK assassination and the 9/11 attacks, most Americans won’t remember where they were when they first heard the news.

Most Americans won’t even hear the news…

Even though it could have a much greater impact on their lives and livelihood than either of the other two catastrophes…

“The DIF is Toast”
But it’s the truth…as Mike Shed

(visit the link for the full news article)


Related News Links:

Here is the full text of the letter:

Dear A-Letter Reader,

That’s right, friend. Read that headline again. Commit it to memory. Unlike the JFK assassination and the 9/11 attacks, most Americans won’t remember where they were when they first heard the news. Most Americans won’t even hear the news… Even though it could have a much greater impact on their lives and livelihood than either of the other two catastrophes… But it’s the truth…as Mike Shedlock points out, “If indeed US$641 million was all that remained of the DIF [Deposit Insurance Fund] the FDIC is now bankrupt. Of the US$641 million left, Community bank used up 781.5 million and Colonial Bank US$2.8 Billion.”

And we checked his math.

From a starting point of US$53 Billion in 2008 – through the 77 bank failures this year alone – the DIF has dwindled to zero. Just in case you’re having trouble, your first reaction should be a mixture of shock and disgust. How – after being paid decades of insurance premiums from all of America’s deposit-taking institutions – could the FDIC go bankrupt after the first wave of bank failures? How is that even possible? Well, first…they haven’t exactly been “collecting premiums” per se. That’s right, in good times the FDIC has one job. To bother banks for comparatively tiny insurance payments. But for most of the time between 1995 and 2006, they collected nothing. Zero. Apparently they had no authority to force banks to pay their premiums, so they simply disregarded the job. Then, as soon as the crisis broke in American banks, the FDIC more than doubled its liabilities…taking their maximum coverage from US$100,000 per account to US$250,000. Was there a corresponding crackdown on premiums? Did they start charging banks twice as much for the insurance, or at least collect the missing premiums from the past decade? Of course not. Instead, they were comfortable with what dwindled to a .014% coverage on their assets. That is to say that for every dollar the FDIC covered, they had 1.4 cents in reserve to insure that dollar. Now the 1.4 cents is gone.

As an Aside…
At the risk of taking us off track for a moment, I can say that the “War on Offshore Banking” makes even more sense now. It’s a great way to distract individuals, keeping them from realizing the reality of the situation… After all, on the one hand you have a network of highly regulated, fiercely competitive financial centers. Most of these offshore guys have clean balance sheets and coherent government management…plus a track record that makes American banks look like payday lenders… For example, during the last rash of bank failures in Switzerland – that’s right, banks even fail in Switzerland – some 200 small, regional banks ended up shutting their doors. At the same time, the FDIC was liquidating nearly a thousand of thrifts and S&L’s in the U.S. How many banks did the Swiss ultimately liquidate? One. They liquidated one bank. Now flash back to the U.S…

On our side of the pond, you’ve got a relatively crooked financial system that’s practically insolvent, kept alive only on emergency government life support, with its traditional safety net – the FDIC – already shredded in the first year of crisis. It’s quite clear that if the U.S. government wasn’t waging a smear campaign against competing financial centers, they’d probably have much bigger problems on their hands than FDIC insolvency. At the end of the day, most politicians will probably argue that the FDIC’s bankruptcy doesn’t matter so much. After all, as we’ve said in past A-Letters, the true purpose of the FDIC isn’t bailing out banks. Its true purpose is making depositors feel safe. Changing their incentives and keeping them from having a run on fragile, poorly run banks. And it’s been successful in that regard… Just look at the “Roaring '20’s,” if you need any proof. Look back before the introduction of the FDIC. Some 500 banks failed every year in the 1920’s, with most succumbing to panicked runs by depositors. Politicians and pundits will probably try to defuse concern over the FDIC’s sudden bankruptcy. They’ll cite the fact that the FDIC has US$100 Billion in back-up funding already approved by Congress. That they can tap into those funds, so there’s no need for mainstream Americans to worry about their bank’s solvency. And maybe they’re right - we put a man on the moon.

Our guys invented the Internet and the personal computer. And a recent study by Joseph Lazzaro concluded that the United States’ total wealth was somewhere between fifty and sixty trillion dollars. Lazzaro goes on to claim that, “no nation has ever created and amassed more wealth in absolute terms than the United States.”

So perhaps it’s possible… Perhaps we can spend away our mistakes and live to see another day. Maybe we pay the piper in inflation…maybe our stock portfolio takes a hit…but the endless wealth machine hammers on, and your money in the bank is as safe as…well…money in the bank.

But remember the FDIC’s purpose…that it’s a psychological “security blanket” for the rank and file. Remember the simple fact that you can’t go on forever spending money that you don’t have. Remember karma’s favorite lesson; that all debts are paid by someone, by hook or by crook.

And remember what I’m about to tell you…

If the FDIC loses its status as a “security blanket” for the average American…well, by then it’ll already be too late to prepare for the fallout.
Yours in Personal Sovereignty,

Matthew Collins, A-Letter Editor



(visit the link for the full news article)

reply to post by skycopilot


Needless to say, the banking crisis, swine flu (now being said to possibly have changed into a more deadly form in Argentina), health care, SR 45 (or is it SR 54?) which makes the 2009 1040 form a mandatory gun self- registration all seem to pointing to a gathering storm of totalitarian socialist self-righteousness aimed at the American People.

Who can help us?

Start with a prayer...

reply to post by skycopilot


Uh, where are your links to back up your claims??
2nd line.............

The problem with America is corrupt politicians and big government.

This is the point that I have been trying to make. America has created a lot of wealth and the question is where did it go?

It started with Bush, the Iraq war and massive borrowing and spending and it has continued with Obama.

Programs like Medicare and Social Security are Pyramid schemes and if you did these things in the private sector, you would go to jail.

Clinton had us in a good spot. Bush was out of control with spending.

He only gave out 12 vetoes vs Reagan 78.

Discretionary spending went through the roof under Bush.

Whereas Reagan was able to reduce non-defense discretionary outlays by 14 percent, Bush will have overseen a rise of 18 percent -- a whopping 32 percent difference between the two men.

www.cato.org...

Obama is set to spend 9 trillion over 10 years. He wants government to take over healthcare and spend more money.

When will Americans learn that they have to stop electing ideologues? Bush is an ideologue and Obama is an ideologue. We need a pragmatist in office. Wether you like Clinton or not, he was a pragmatist and the radical left couldn't stand him and the DLC.

The far right and the radical left will destroy this country. They only see ideology and that's horrible.

Originally posted by rangersdad
reply to post by skycopilot

 

Uh, where are your links to back up your claims??
2nd line.............

How about some links to back it up?

2nd

I did a search for text and phrase strings in the letter...These are the sites I found pertaining to this letter:

1. www.sovereignsociety.com... Click Here to see it.

2. It leads to a "special report" by John Pugsley: www.web-purchases.com... Click Here to see that it seems as nothing more than a scheme to order something (very bottom of page), and that something is: Membership Application to The Sovereign Society which costs $49.00 a year.

Dead thread or what? I could'a swore there was a no free advertising threads rule...perhaps I'm wrong.

3. I did also find it on eubankers.net and eurobankers.net. But that was it. Just a simple Google search of the first two sentences ("That’s right, friend. Read that headline again. Commit it to memory.") gleaned the info.

Prove me wrong and I formally apologize, but I doubt you will. :/

o/* waste o'space.

4. Oh, and just a funny little note...this was all is disregard to the top search result, of this very page.

EDIT: Numbers - :/

[edit on 21-8-2009 by lagnar]

reply to post by j2000






The FDIC is Broke!

The fact that the market closed today at over 9,500 is not trival. You are about to see a sell off of magnanimous proportion!

"Lock the Doors, Kill the Lights.
No one's coming home tonight.
The sun beats down and don't you know.
All are lives are growing cold" - No Quarter by Led Zeppelin

Get ready kids, becasue the fun is about to begin

[edit on 21-8-2009 by OnTheFelt]

I'm certainly not sayin' it's gonna be pretty as it's already proving tenuous at best around my home. I'd just like to know where this "A-Letter" came from. If anyone has any ideas, it could be of great help...either way.

I also did a quick search for "A-Letters" and "A Letter" and "A Letters", because of the phrase "passed A-Letters" being used, and nothing's coming up.

That's why we always post links, right? Perhaps I'm just trying to distract myself from the meat of the issue until I know what it was fed?

EDIT: Meat - How low does the ratio go in the Fractional Reserve System again? Isn't it something like 10%? A little off of the current 1.4% I'd say, but we all knew it was corrupt in the first place. We just always counted on no one else wanting to get all their money out the same time we did.

Truly not good...wherever this came from.

[edit on 21-8-2009 by lagnar]

reply to post by skycopilot


The FDIC's trust had about $13 billion in its primary account .. add the 5 bank failures last Friday, the fund lost over $3billion. Has a little under $10billion left.

In 2008 the FDIC devoted $25 billion to a secondary fund.. so there is aprox $35 billion.

In 1992 the FDIC had a negative baallance of a few billion. The world didn't end.

Honestly its the last thing you need to worry about..

Yup, I counted it up.

FDIC beginning balance: $17B

Bank Name Cost ($M) Closing Date
ebank $63 21-Aug-09
Guaranty Bank $3,000 21-Aug-09
CapitalSouth Bank $151 21-Aug-09
First Coweta Bank $48 21-Aug-09
Community Bank of Arizona $26 14-Aug-09
Union Bank, National Association $61 14-Aug-09
Colonial Bank $2,800 14-Aug-09
Dwelling House Savings and Loan Association $7 14-Aug-09
Community Bank of Nevada $782 14-Aug-09
Community National Bank of Sarasota County $24 7-Aug-09
Community First Bank $45 7-Aug-09
First State Bank $116 7-Aug-09
Peoples Community Bank $130 31-Jul-09
First State Bank of Altus $25 31-Jul-09
Integrity Bank $46 31-Jul-09
First BankAmericano $15 31-Jul-09
Mutual Bank $696 31-Jul-09
Waterford Village Bank $6 24-Jul-09
Security Bank of Bibb County $807 24-Jul-09
Security Bank of North Metro 24-Jul-09
Security Bank of Gwinnett County 24-Jul-09
Security Bank of North Fulton 24-Jul-09
Security Bank of Houston County 24-Jul-09
Security Bank of Jones County 24-Jul-09
Temecula Valley Bank $391 17-Jul-09
Vineyard Bank $597 17-Jul-09
BankFirst $91 17-Jul-09
First Piedmont Bank $29 17-Jul-09
Bank of Wyoming $27 10-Jul-09
First State Bank of Winchester $6 2-Jul-09
Elizabeth State Bank $11.20 2-Jul-09
First National Bank of Danville $24 2-Jul-09
Founders Bank $188.50 2-Jul-09
Millennium State Bank of Texas $47 2-Jul-09
John Warner Bank $10 2-Jul-09
Rock River Bank $27.60 2-Jul-09
Community Bank of West Georgia $85 26-Jun-09
Mirae Bank $50 26-Jun-09
MetroPacific Bank $29 26-Jun-09
Horizon Bank $33.50 26-Jun-09
Neighborhood Community Bank $66.70 26-Jun-09
Southern Community Bank $114 19-Jun-09
First National Bank of Anthony $32.20 19-Jun-09
Cooperative Bank $217 19-Jun-09
Bank of Lincolnwood $83 5-Jun-09
Strategic Capital Bank $173 22-May-09
Citizens National Bank $106 22-May-09
BankUnited, FSB $4,900 21-May-09
Westsound Bank $108 8-May-09
Citizens Community Bank $18.10 1-May-09
Silverton Bank, NA $1,300 1-May-09
America West Bank $119.40 1-May-09
American Southern Bank $41.90 24-Apr-09
First Bank of Idaho $191.20 24-Apr-09
First Bank of Beverly Hills $394 24-Apr-09
Michigan Heritage Bank $71.30 24-Apr-09
Great Basin Bank of Nevada $42 17-Apr-09
American Sterling Bank $42 17-Apr-09
New Frontier Bank $670 10-Apr-09
Cape Fear Bank $131 10-Apr-09
Omni National Bank $290 27-Mar-09
Colorado National Bank $9 20-Mar-09
TeamBank, NA $98 20-Mar-09
FirstCity Bank $100 20-Mar-09
Freedom Bank of Georgia $36.20 6-Mar-09
Security Savings Bank $59.10 27-Feb-09
Heritage Community Bank $41.60 27-Feb-09
Silver Falls Bank $50 20-Feb-09
Corn Belt Bank & Trust Co. $100 13-Feb-09
Riverside Bank of the Gulf Coast $20 13-Feb-09
Sherman County Bank $28 13-Feb-09
Pinnacle Bank of Oregon $12.10 13-Feb-09
County Bank $135 6-Feb-09
Alliance Bank $206 6-Feb-09
FirstBank Financial Services $111 6-Feb-09
Suburban FSB $126 30-Jan-09
Ocala National Bank $99.60 30-Jan-09
MagnetBank $119.40 30-Jan-09
1st Centennial Bank $227 23-Jan-09
National Bank of Commerce $97.10 16-Jan-09
Bank of Clark County $132.50 16-Jan-09
Total $21,411.4 Million ($21.4B)


[edit on 22-8-2009 by Dbriefed]

reply to post by Rockpuck

Honestly its the last thing you need to worry about..

Yes the REAL thing to worry about is "consumer confidence" and a run on the bank. Banks do not keep more than 3% to 10% cash on hand so a run on the banks is a real worry. The "ALL" the money does not exist and never has!

Originally posted by OnTheFelt
The FDIC is Broke!

FDIC Criticizes Massachusetts Bank With No Bad Loans for Being Too Cautious

A Massachusetts bank that has defied the odds and remained free of bad loans amid the economic crisis is now being criticized by the Federal Deposit Insurance Corp. for the cautious business practices that caused its rare success.

The secret behind East Bridgewater Savings Bank's accomplishments is the careful approach of 62-year-old chief executive Joseph Petrucelli.

"We’re paranoid about credit quality," he told the Boston Business Journal.

That paranoia has allowed East Bridgewater Savings Bank to stand out among a flurry a failing banks, with no delinquent loans or foreclosures on its books, the Journal reported. East Bridgewater Savings didn’t even need to set aside in money in 2008 for anticipated loan losses.

But rather than reward Petrucelli's tactics, the FDIC recently criticized his bank for not lending enough, slapping it with a "needs to improve" rating under the Community Reinvestment Act, the Journal reported.

Probably the single most telling segment I've read about the intent of some of these banksters.

A failing insurance fund telling a successful business, with their insurance policy, they fail? tee hee

reply to post by crimvelvet


True.. a run on the banks could bring the system down. Of course that's actually already happened.. research the October Market Crash of 2008. You will find something that MSM hardly ever talked about.

There was a "digital" run on the banks, someone withdrew tens of billions from money market funds, effectivly bringing the system to a collapse... the Treasury had to stop all transactions.

Shows how delicate the system is.